Mr. Jagan Mohan Reddy is the main sponsor and the main shareholder. Together with family and associates, he holds about 46.9% of Rain’s equity, the balance held by financial institutions, general public and other corporates. IFC has a 5% shareholding in Rain.

In the proposed transaction, IFC would purchase and on-sell CERs. There is no investment or project financing involved in this transaction.

39.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management	39.0
Guarantee
Loan
Equity

* These investment figures are indicative

The Rain facility is located on a 42.5-acre site, in the Visakhapatnam Port Area. The site is approximately three kilometers from the deep water dock where green petroleum coke, the main feedstock, is discharged and export shipments of calcined petroleum coke are loaded.

- Development Impact: This transaction complements the development outcomes achieved out of IFC’s previous project with Rain, which eliminated the primary use of fossil fuels by the Company’s operations. The single largest development impact of the transaction is that over the five year transaction horizon, the generation of an estimated 825,000 tonnes of carbon dioxide equivalent will be eliminated, while a total of 2.5 million tonnes of carbon dioxide will be eliminated assuming an estimated 15 year life of the project. Through supporting an Indian company gain access to carbon finance in the way this transaction is structured, the project could encourage similar deals with local companies. - World Bank Group Strategy: The project is compatible with the overall WBG and IFC strategy to support the development of competitive local industry in India. In particular, the proposed transaction is consistent with IFC’s approach to Climate Change by helping reduce greenhouse gases and expanding the market for carbon finance. The World Bank Group Country Assistance Strategy (CAS) for India aims to strengthen the enabling environment for sustainable private–sector-led growth and support critical interventions of special benefit to the poor and disadvantaged. To support these objectives, the World Bank Group will concentrate its assistance on improving government effectiveness and on promoting private sector-led growth by: - Facilitating greater competitiveness through: improvements in the investment climate; improved financial intermediation to the private sector; and direct support to firms to promote sustainable growth and competitiveness; - Improving the quality and quantity of infrastructure through greater private sector participation; - Promoting the provision of private health services; and - Improving rural productivity and growth through greater private sector investment.

Under the Kyoto Protocol, the carbon credit mechanism has led to the development of an important trading market between the developed and the developing nations. IFC’s key role is that of an intermediary supporting the efforts of developing nation companies to access the international market in a transparent manner. - Role in Improved Market Access: By credit enhancing Rain’s CER sales through its guarantee, IFC would facilitate the company’s access to the best global CER markets and customers, leading to better prices. - IFC’s Principal Additionalities: Providing a fully transparent approach: - IFC is offering Rain a pre-determined spread with a transparent price, which would allow Rain to benefit from increases in the market price of CERs. - Customized Risk Structuring: IFC’s long relationship with Rain gives us significant comfort and familiarity with the company’s operations. As a result, IFC has been able to develop a tailor-made structure for Rain. The escrow structure proposed by IFC allows Rain to use its CERs as first loss takers for under-delivery, thereby containing the risks within the transaction structure.

IFC has been monitoring the performance of the company’s operations as part of the IFC previous investment. Key environmental, social, health and safety issues relevant to the operations include: 
- emissions to the environment (e.g. air and water, solid waste and toxic/hazardous materials management);
- environmental management system (EMS);
- industrial hygiene and occupational safety and health (training, personal protective equipment, and collection/monitoring of accident statistics.)

The company has demonstrated an overall sound performance.

Performance standards that are applicable for this investment, therefore, include the following:

- PS1: Social and Environmental Assessment and Management System
- PS2: Labor and Working Conditions
- PS3: Pollution Prevention and Abatement
- PS4: Community Health, Safety and Security

Based on this review, this project will require thirty (30) days disclosure by IFC prior to Board and has been categorized as a category B.